Many types of individual files require updating of record information contained therein, such as insurance policy files, credit information files, bank accounts, loan records, payroll records, and the like. Changing particular information in a file can result in the need to make additional changes in other information contained in a file, such as changes relating to actions that are taken based upon information in the file.
For example, the record information pertaining to individual insurance policies of a policy class is commonly maintained by an insurer in files (typically, one file per policy). Each file on a policy must be amended continuously to record changes in various informational items, such as, for example, premium notices, premium payments, policy cash value, status of any loan against the policy, any change in policy terms, agent commission payments due or payable, and the like. A change in one policy item, such as the amount of the premium due or paid, or the like, can generate changes in other policy items, such as, for example, in policy terms or in agent commission payments.
Certain informational changes in particular items must, in effect, be entered retroactively. In, for instance, the case of an insurance policy file, examples of retroactively entered record changes can include policy terms, correction of errors entered previously, various financial matters, and the like.
Previously, in the prior art, to enter a change retroactively into a policy file, the insurer was required to undertake the laborious process of first retracing and negating all items in the file pertaining to a retroactive information change in an item proceeding first back in time to the effective or proper date for the retroactive change, then entering the retroactive change, and finally reentering and updating all the negated items in the forward direction. Because of the amount of time and labor involved in entering retroactive transactional changes into an insurance policy file using conventional procedures, a computerized system for entering retroactive information would be desirable.
In one presently preferred prior art system for computerized maintenance and administration of insurance policy files which is identified as "The Administrator", a permanent file record of each policy is created initially. Previously, in "The Administrator" system, the file creation time corresponded either to the effective policy date or to the date when an old and different file maintenance system file was converted to "The Administrator" system. Conveniently and preferably in "The Administrator" system, the file issue record of each policy is entered on a (computerized) form that is common to all policies of a given policy class.
As used herein, the term "date" refers to the calendar date plus clock time, unless otherwise indicated.
The prior "The Administrator" system, in addition to the initial issue record file, also maintains a single working record image of each active insurance policy. Each such image preferably in a form similar to that used for the file issue record except that the single working record image has recorded therein all information (i.e. accounting record) relating to any changes in the policy occurring after the file creation date (including any retroactive transactional changes that have occurred in that policy) up to the present date.
In addition, a plurality of time spaced stored images are also maintained for each file. These latter stored images which are each periodically generated (recorded) from a current embodiment of the working record image as it exists at the time as of each individual stored time spaced image's recordation date.
As used herein, the term "transactional change" refers to any quantitative informational change pertaining to a policy, such as information change of a character as above indicated, involving addition, deletion, alteration, amendment, error correction, or the like. In connection with a transactional change, the term "retroactive" means that the change is effective or intended to be effective as of a date that is termed the "effective date". The effective date always occurred prior to the present date.
In other words, at each particular user-selected date, the working record of each policy is recorded (i.e., "saved") in the form of a retrievable single document or "image" that is comparable to a photographic "snapshot". Thus, an individual image of a working record file provides the complete status of a policy at the image recordation date. For each policy file, a plurality of images exist that are individually successively recorded at respective spaced, user-selected time intervals.
As used herein, the term "policy image" or "image" refers to the complete data and information pertaining to a particular policy at a given time.
Also in "The Administrator" system, a companion historical file is maintained for each individual insurance policy file in addition to the image plurality. Each historical companion file stores, by date, and over a time interval, every accounting transaction information relating to a policy file. The transaction information forms depend on the type of transaction information involved, such as a financial transaction, a maintenance transaction, an accounting record, or the like.
In addition, the term "financial transaction" refers to a transaction which involves a sum of money that is being applied towards the monetary value(s) of an insurance policy.
As used herein, the term "maintenance transaction" refers to a transactional change involving an insurance policy which affects only future or current policy information processing and does not affect any policy information processing which pre-dates the maintenance transaction.
Moreover, the term "accounting record" refers to either a financial transaction or a maintenance transaction for an insurance policy. If an accounting record is a maintenance transaction, then the system accesses an image of that maintenance.
The companion historical file is in effect a subfile relating to a particular insurance policy which subfile holds all quantitative information concerning that policy.
In this prior "The Administrator" policy maintenance system, when a particular retroactive transactional change is to be entered into the policy working file, the policy image which immediately precedes the effective date of the desired retroactive transactional change is retrieved. All accounting records and maintenance transactions existing in the companion historical file which occurred between the effective date of the retroactive transactional change and the date of the so retrieved policy image are now entered into the retrieved image. Thus, the resulting image of the retrieved file establishes the file policy retroactively in the form that it existed at the effective date of the desired retroactive transactional change. The resulting image is thus converted to an intermediate image.
Next, a so-called "backout" is performed on the resulting image. In the prior "The Administrator" system backout, all transactional changes which occurred during the time period extending from the effective date of the desired retroactive transactional change to the present date were effectively negated. The backout is performed with all arithmetic signs reversed.
As used herein with reference to "The Administrator" system as it previously existed, the term "backout", "backing out", "backed out", or equivalent refers to the processing of adjusted information (usually quantitative in nature) into a file pertaining to a policy which information was entered into a companion historical file and processed on an image in the time period extending from the effective date of a desired retroactive transactional change to the present date. Since the backout is carried out with reverse arithmetic signs, each and every financial transaction or maintenance transaction which occurred in this time period in the file is negated.
Next, when the backout is completed, the desired retroactive transactional change is applied to the resulting intermediate image (using the correct mathematical sign) and accordingly, the intermediate image is thus converted to an adjusted image.
As used herein, the term "apply", "application" or the equivalent refers to the processing (i.e., entering) into an image either a financial transaction or a maintenance transaction record involving the policy that is covered by this file. The apply processing step subroutine is always current which means that a backout has been performed and that a reapply is not in progress.
Thereafter, when the application is completed, any and all of the subsequent transactional changes in a policy that occurred after the effective date of the particular retroactive transactional change and that were previously entered into the file policy are reapplied in the adjusted image using the correct arithmetic signs.
As used herein, the term "reapply" refers to the processing (i.e., entering) into a file any and all financial activity and administrative maintenance involving the policy that is covered by the file. The reapply processing step subroutine is practiced after a backout and an apply.
The adjusted image is thus converted to a corrected image that fully and properly incorporates the desired retroactive transactional change. This corrected image is now the working record image from which the policy will be administered.
The successive step combination of the reversed sign backout, the application and the reapplication results in entering a retroactive transactional change into a selected retrieved image file and processing this image to produce the corrected image. The corrected image now becomes the working record image, which constitutes a file that has the same status or state that a currently produced file would have had if the desired, retroactive transactional change had been made on a timely basis at the effective date of such desired retroactive transactional change. In addition, all transactional changes that occurred after the effective date of the desired retroactive transactional change, such as, for example, commission payments, policy changes, and the like are automatically corrected.
The basic principle of this procedure is that all calculations are performed in the forward direction in time which simplifies all calculations.
Although promising in some of its aspects, this prior art insurance policy file maintenance system suffered various severe disadvantages. For one thing, this prior art system was unable to process suspended insurance policies. For another thing, this prior art system was unable to prorate a calculation so as to provide the capacity to deal with such matters as policy suspension, policy cancellation, agent commissions or the like. For another thing, this prior art system did not have the ability to utilize and convert policy data existing in an earlier policy file maintenance systems into a policy file such as is employed in the present system. These disadvantages have substantially limited the utility and practical usability of this prior art system.
The art needs a new and improved computerized forward-based method that can be used in combination with this prior art "The Administrator" system and which overcomes these disadvantages. The present invention provides such a method.